We propose to examine, using a quasi-experimental design, the impact of a financial incentive system to place physicians more at risk for the costs of delivering services to prepaid patients. The setting in which we will study the impact (Carle Clinic Association) represents an unusual opportunity to study the effects of changing the financial incentives for prepaid patients because (1) all Carle physicians treat both HMO (health maintenance organization) and FFS (free-for-service) patients, with sufficient number on cases and comparable information collected for both types of patients; (2) the physicians practice in the same setting for both inpatient and outpatient practice; (3) comparable patient data are available both preceding and following the introduction of a major and unique change in the incentive structure for treating HMO patients and (4) prospectively gathered information from the physicians and archival information from the organization are available to assess the factors which predict the changes observed. As a large group practice in which HMO and FFS patients are treated concurrently and patient service data are gathered identically, this study offers many design strengths and focuses on an increasingly common type of HMO which has been seldom studied to date. It examines the impact of a financial incentive change in a prospective fashion and in a community setting, but with sufficient sample size to and in the generalizability of the results.